Ten money-saving tips: Financial spring cleaning

PAUL LOTHIAN

WITH the new tax year under way and winter behind us, it’s time for spring cleaning – and not just around the house.

Taking an hour or two to review your finances can reap often surprising dividends, whether from identifying money wastage, spotting new ways to boost your income or improving the arrangements you already have in place. Paul Lothian, director at Verus Financial Planning in Dundee, offers his top tips on tidying your financial affairs

Household bills

It’s quite a daunting prospect to change suppliers of our gas, electricity, broadband or phone. However, help is at hand in the form of comparison sites such as www.uswitch.com and www.energyhelpline.com. Before switching, contact your current provider to tell them you are leaving – they may well try to retain your custom by sweetening their terms.

Household budget

Do you know how much you spend and on what? Most people would be surprised (and even shocked) if they took the time to note down in detail exactly what they have coming in and where the money goes. Once you’ve done this, you can identify areas for improvement and changes. Bank and credit card statements are a good starting-place for this exercise.

Cash Isas

You can contribute up to £5,760 to cash individual savings accounts (Isas) in the new tax year. Those with sufficient capital or surplus income should try and maximise their available tax-free Isa allowances. If you have already built up cash Isa funds, make sure you are getting a competitive rate of interest to maximise the tax benefit. Cash Isas can easily be transferred, so don’t let your loyalty to your bank or building society (or your inertia, which these institutions exploit) cost you money. See comparison sites such as www.moneysupermarket.com and www.moneyfacts.co.uk for the best rates.

Stocks and shares Isa

The annual limit for stocks and shares Isas is £11,520 in the 2013/14 tax year, minus the amount you put into a cash Isa. Long-term investments should be made as tax-efficient as possible and this means maximising the use of stocks and shares Isa allowances. For those with sufficient capital/income, financial advisers generally advocate foregoing any cash Isa subscriptions in favour of maximising allocation towards the stocks and shares Isa component. This is because the potential returns (and therefore the tax savings) are greater in stocks and shares. Cash Isas can be converted/transferred into stocks and shares Isas, but not visa-versa.

Pensions

Have you reviewed the level of your retirement savings lately? Do you know whether they will be sufficient to meet your retirement objectives? Check out the calculator at www.moneyadviceservice.org.uk/yourmoney/interactive/pension_calculator.aspx

Also, where are your pension funds invested? Is your money languishing in a poor-performing managed or with profits fund? Look into the investment options under your plan. Find out what you are paying in charges.

Mortgage

If you are not locked in to your current mortgage deal by redemption penalties, see how much you could save by re-mortgaging. Those whose mortgages are less than 80 per cent of their property’s value are most likely to be able to make savings. Many lenders offer remortgage products with no fees. Consider overpaying on your mortgage in order to repay the loan ahead of schedule. Overpayments can generally be taken back as payment holidays in the future if necessary.

Life cover

Is your current level of protection adequate? Are you receiving good value for money from your current policies? www.invidion.co.uk/life_insurance_calculator.php will help you answer the first of these questions and www.confused.com/life-insurance will help with the latter. Remember, don’t cancel any existing policies until the new cover is in force.

Unsecured borrowing

If you have credit card or overdraft balances, make sure you are not paying more in interest and other charges than is necessary.

Average personal loan interest rates have risen sharply since the credit crunch, so it may be difficult for all but those with the best credit scores to effect any savings on unsecured borrowings.

Zero per cent interest deals on credit card balance transfers remain available, although they tend to come with an initial fee typically up to 3 per cent of the transferred amount.

Investments

Do you have an investment strategy, or are your investments a hotch-potch of seemingly random shares, funds and products?

Do you understand what risks your capital is exposed to or how your funds have performed relative to the market/ their peers? www.morningstar.co.uk offers an independent fund rating service and also maintains fund performance statistics.

Car and home insurance

Despite almost universally rising premiums, this remains a fiercely competitive market. Significant savings can be made by handing your motor and household insurances to a single provider. Don’t wait until your renewal date looms (when time pressures may mean that you don’t manage to shop around effectively). Visit one of the many comparison sites now to get an indicative quote. You can then save your details to enable a re-quote when the renewal dates comes around. There are significant differences in cover offered, so make sure you are comparing like with like.

This website and its associated newspaper adheres to the Independent Press Standards Organisation's Editors' Code of Practice.
If you have a complaint about editorial content which relates to inaccuracy or intrusion, then contact the
Editor by clicking here.

If you remain dissatisfied with the response provided then you can contact the IPSO by
clicking here.

The Scotsman provides news, events and sport features from the Edinburgh area. For the best up to date information relating to Edinburgh and the surrounding areas visit us at The Scotsman regularly or bookmark this page.

For you to enjoy all the features of this website The Scotsman requires permission to use cookies.

Find Out More ▼

What is a Cookie?

What is a Flash Cookie?

Can I opt out of receiving Cookies?

About our Cookies

Cookies are small data files which are sent to your browser (Internet Explorer, Firefox, Chrome etc) from a website you visit. They are stored on your electronic device.

This is a type of cookie which is collected by Adobe Flash media player (it is also called a Local Shared Object) - a piece of software you may already have on your electronic device to help you watch online videos and listen to podcasts.

Yes there are a number of options available, you can set your browser either to reject all cookies, to allow only "trusted" sites to set them, or to only accept them from the site you are currently on.

However, please note - if you block/delete all cookies, some features of our websites, such as remembering your login details, or the site branding for your local newspaper may not function as a result.

The types of cookies we, our ad network and technology partners use are listed below:

Revenue Science ►

A tool used by some of our advertisers to target adverts to you based on pages you have visited in the past. To opt out of this type of targeting you can visit the 'Your Online Choices' website by clicking here.

Google Ads ►

Our sites contain advertising from Google; these use cookies to ensure you get adverts relevant to you. You can tailor the type of ads you receive by visiting here or to opt out of this type of targeting you can visit the 'Your Online Choices' website by clicking here.

Digital Analytics ►

This is used to help us identify unique visitors to our websites. This data is anonymous and we cannot use this to uniquely identify individuals and their usage of the sites.

Dart for Publishers ►

This comes from our ad serving technology and is used to track how many times you have seen a particular ad on our sites, so that you don't just see one advert but an even spread. This information is not used by us for any other type of audience recording or monitoring.

ComScore ►

ComScore monitor and externally verify our site traffic data for use within the advertising industry. Any data collected is anonymous statistical data and cannot be traced back to an individual.

Local Targeting ►

Our Classified websites (Photos, Motors, Jobs and Property Today) use cookies to ensure you get the correct local newspaper branding and content when you visit them. These cookies store no personally identifiable information.

Grapeshot ►

We use Grapeshot as a contextual targeting technology, allowing us to create custom groups of stories outside out of our usual site navigation. Grapeshot stores the categories of story you have been exposed to. Their privacy policy and opt out option can be accessed here.

Subscriptions Online ►

Our partner for Newspaper subscriptions online stores data from the forms you complete in these to increase the usability of the site and enhance user experience.

Add This ►

Add This provides the social networking widget found in many of our pages. This widget gives you the tools to bookmark our websites, blog, share, tweet and email our content to a friend.